Before you set up an online shop you'll need to acquaint yourself with the Distance Selling Acts. The article will focus on websites that sell goods/services online.

And it's various amendments over the years, including:

The Basics

If you sell online, you'll want to understand the Distance Selling directive. It covers contracts that are transacted "facelessly", which includes goods and services purchased online as well as those by mail order, SMS, fax, phone and teleshopping.

The regulations exist to give consumers the equivalent rights and protections they would have in the high street - like examining the goods beforehand or discussing the terms of a service.

Distance Selling regulations do not apply to:

  • Business to business contracts
    The regulations exist to give consumers protection the same as if they were shopping on the high street. So if you're distance selling B2B, then by definition the distance selling regulations don't apply.
  • Financial services (eg banking/insurance/investment) to consumers
    Check out S.I. No. 63/2005 if you want more on Distance Marketing of Consumer Financial Services
  • Sale of property, freehold or leasehold interests
  • Contracts for Hire Purchase
  • Contracts with a telecommunications operator over a public phone
  • Automated vending machines
  • Auctions

Other exceptions

While the Distance Selling Act does apply to the following, they are exempt from having to provide pre contractual and written confirmation. Also the consumer's statutory right to cancel in 7 working days and receive a full refund for same does not apply.

  • Delivery of food/drink by regular roundsmen (eg milkman)
  • Accommodation, transport, catering or leisure services supplied on a specific date or period

Pre Contractual: information that you must supply to consumers before they buy

The following information must be made available to the consumer before they buy. In other words, this should be clearly spelled out on your website, and the consumer should have clear direction as to where to find this information on your website. If you do not make this information available prior to purchase, your distance contract may be unenforceable:

  • Your name and geographical address
    If the consumer is to pay for the goods/services before receiving them, the supplier must provide a full geographic address.
  • Your phone, fax and email address so that the customer can easily make contact with you
  • Description of goods/services
  • Price of goods/services, incl VAT and taxes
  • Price of any other "inescapable" costs
  • Details of how payment can be made
  • Shipping costs and shipping method
  • Shipping times - for goods. For services - when they will begin
  • Minimum duration of the contract (eg in the case of recurring subscriptions)
  • How long a price/offer is valid
  • Whether or not a substitution may be made because the goods/services are no longer available
    In the case of a substitution, the supplier is obliged to inform the consumer of a substitution and both refund and carry the cost of return if the consumer is not satisfied with the substitution
  • The right to cancel - your right to cancel, as well as the consumers
  • If the right to cancel exists, you must provide all the correct information and procedures including time limit, conditions and a form (a web form is ok) that the consumer can fill out advising you of their wish to cancel. The consumer can also advise you of this by phone or email. But you still have to provide the form and clearly direct the consumer to it.
    See sample form

    [Complete and return this form only if you wish to cancel the contract.]
    To [here the trader’s name, geographical address and, where available, his fax number and e-mail address are to be inserted by the trader]:
    I/We [*] hereby give notice that I/We [*] cancel my/our [*] contract of sale of the following goods[*]/for the provision of the following service [*]
    Ordered on[*]/received on [*]
    Name of consumer(s)
    Address of consumer(s)
    Signature of consumer(s) [not required for web form]
    Date

Written confirmation: must be provided when the consumer orders online

The contract begins as soon as the consumer sends the order. At this point you must send the consumer a written confirmation of the contract by email (or any "unalterable" medium) containing all the information set out in the previous section as well as the following:

  • Terms of cancellation including terms of any refund within the cancellation period
    The statutory cancellation period is 7 working days, some exceptions may apply (see exceptions)
  • Timeframe and who pays for the return of goods
    The statutory timeframe for delivery of goods is no more than 30 days. If the seller goes over the 30 days, the consumer is entitled to a full refund
  • Conditions of cancellation for ending an open-ended contract, or one that lasts more than a year
  • Conditions of cancellation for services provided within a specified timeframe (eg bus/rail/plane ticket, hotel booking, theatre tickets etc)
  • Where a service is concerned, the consequences of cancellation if the service begins before the end of the 7 working day cancellation period
  • Provide details of guarantees and after-sales service where applicable
  • A geographical address for consumer complaints

If you do not send the consumer a written unalterable contract "in good time" - eg your email arrives after the goods are received, then the cancellation period of 7 working days will be extended under the legislation. The rules are there to protect the consumer and give him/her sufficient time to act.

Consumer's Statutory Rights to Cancel

Under the legislation, the consumer has the right to cancel the goods/services within 7 working days, the right to cancel starting whichever is the later of these two:

  1. The day the goods/services are received
  2. The day the written contract is received

The right to cancel includes any credit arrangements. The right to cancel is automatically extended to 3 months should the supplier fail to provide a written contract. You have 30 days to refund the consumer from the day you receive the notice of cancellation.

Therefore it is very important that you make clear the following both on your website (pre-contractual information) and in the email you send once the consumer has ordered online ("written contract"):

  • If your cancellation period qualifies to be shorter than the statutory 7 working days (see Exceptions below)
  • Who is responsible for bearing the cost of returning the goods
  • Terms of refunds/partial refunds if they apply

Exceptions to Consumer Rights to Cancel

There are certain "allowable" exceptions to the consumer's statutory right to cancel. These are:

  • Goods that are "tailor made" for the consumer (cannot be resold)
  • Perishable goods (cannot be resold)
  • Media that can be copied (eg CD, DVD) cannot be cancelled if the manufacturer's seals are broken
  • Newspapers/magazines, gaming and lottery services
  • Services that have already begun (before the end of the statutory 7 working days cancellation period)
  • Financial goods whose prices fluctuate on a daily basis (eg stocks/shares)

Penalties and Governance

The penalty for non-conformance is up to EUR3000. The body overseeing the regulations is the National Consumer Agency of Ireland.

Tagged under: Legals ECommerce

Last updated: 23 May 2018